The Bottom Line | Is Graphite the Answer to F-Commerce Woes?

LONDON, United Kingdom — It wasn’t so long ago that many technology analysts made bold predictions on the potential of so-called 'F-commerce,' the practice of using Facebook as a direct sales channel. Some even speculated that transactions conducted on Facebook, the world’s most visited website, could threaten e-commerce giant Amazon. But, thus far, selling directly on Facebook has failed to take off. Indeed, in the last year, major fashion retailers like JC Penney, Gap and Nordstrom have shuttered their Facebook stores, citing unsatisfactory results.

While it may be too soon to declare it an outright flop, many have linked the poor performance of F-commerce to a fundamental issue: visitors to Facebook, who use the platform to connect and socialise with friends, are simply not in the mindset for shopping and that putting the proverbial cash register next to the proverbial watercooler is a fundamentally flawed approach.

“It was like trying to sell stuff to people while they’re hanging out with their friends at the bar,” Sucharita Mulpuru, a senior analyst at Forrester Research and outspoken F-commerce skeptic, told Bloomberg earlier this year.

Others have attributed the poor results to unimaginative retailers who failed to adapt their approach to the Facebook platform and offered users nothing more than a simplified e-commerce experience. “It was basically just another place to shop for all the stuff already available on the retailer websites,” said Wade Gerten, founder and chief executive officer of 8th Bridge, a leading social commerce development company (and the first to open a Facebook store in 2009 for 1-800-Flowers).

Now, 8th Bridge has launched a new social commerce product that turns the traditional F-commerce model on its head. Rather than bringing the cash register to the watercooler, the platform, called Graphite, puts the watercooler next to the cash register, bringing a Facebook-powered social layer to existing commerce channels, for example brand e-commerce sites. “F-commerce is a brand to fan channel [whereas] Graphite enables friend-to-friend advocacy,” Graphite’s chief product officer, Jon Kubo, told BoF. It’s a proposition that has already enticed a number of fashion and apparel companies, from venture-backed e-commerce startup Nasty Gal to Oscar de la Renta, which is set to implement the platform at the end of June to coincide with the launch of the brand’s new website.

Graphite’s offerings are threefold. Using the platform’s “social expressions” functionality, marketers can go beyond Facebook’s generic “Like” button and create custom buttons for things like “Love,” “Own,” “Neeed,” “Ask a Friend” or “I Can’t Wait to Wear,” which they can then deploy to their existing e-commerce sites. “Using Graphite to integrate social expression into these high-traffic channels provides significantly more chances for brand advocates to share with their fans,” said Kubo.

When users interact with these buttons, the expression is published to their Facebook timelines along with a widget-like “shoppable story” that also appears on their timelines and in their friends’ newsfeeds, allowing others to get more information and examine the product in question without leaving Facebook. “Facebook users are 18 times more likely to engage with a shoppable story than a link, because links mean leaving Facebook,” said Kubo. If a user wishes to purchase the product, however, they are taken to the brand’s existing e-commerce channel to complete the transaction.

The data generated through interaction with these buttons can also be used to better personalise a user’s shopping experience. What’s more, Graphite’s “interest graph API” allows brands to easily integrate this data into their existing marketing systems. For example, if a customer shares the fact that she “wants” a particular product on a brand’s website, an email can be generated to notify them if that product goes on sale. “The interest graph API is a key way brands are monetising their social commerce programs because it provides a level of personalisation not possible before with social graph data.”

So how well is it working?

“Our results have been very positive, with a stronger connection to our direct website,” Nasty Gal founder and chief executive, Sophia Amoruso, told BoF. “The Nasty Gal customer has strong opinions about our products and Graphite gives them a more engaging way to share and post on Facebook,” she continued. "What’s more, Nasty Gal’s social buttons — for example, “Gimme”, “Neeeed”, and “<3, <3, <3” (love, love, love) — were custom-designed with the tone of the retailer and its target consumer in mind. “Our customers rarely just ‘like’ something,” added Amoruso. “They want to shout out about it and convey real excitement and Graphite’s enabled us to offer that.”

Early results indicate that the platform is driving sales, as well. According to data provided by 8thBridge, each share using Graphite’s social buttons generates approximately one visit to a retailer’s e-commerce site, 85 “shoppable stories” and $3 in sales revenue.

The Bottom Line

Facebook has proven to be an exceptionally effective tool for brands looking to communicate with fans. But, thus far, the platform hasn’t been able to effectively drive commerce. Graphite’s early results suggest that putting the watercooler next to the cash register might, indeed, be a better approach. But with the company’s recent IPO, the pressure Facebook is facing to turn F-commerce around is mounting and there may still be reason to believe that there’s money to be made by the watercooler yet.